Butterfield Review (Hansard, 15 July 2003)

§ The Economic Secretary to the Treasury (John Healey)

Further to my written statement to the House on 4 July 2003,Official Report, column 4OWS, I can announce that today the Government are publishing in full the independent report, its summary and recommendations, of the hon. Mr. Justice Butterfield following the completion of his review.

The Attorney General and I asked Mr. Justice Butterfield to examine the circumstances that led to the termination of the London City Bond (LCB) prosecutions in Liverpool Crown Court on 25 November 2002, the changes in practice within HM Customs and Excise (HMCE) since the time of the cases to which those prosecutions related, and HMCE's compliance with best practice in the use of investigation techniques. The full terms of reference for this review were announced in the written statement I made to the House on 26 November 2002, Official Report, column 9WS. In addition the House will be aware that the Government are looking at the links between law enforcement agencies which investigate serious crime, alongside the review the Chancellor has announced on the future of the tax institutions.

The Government welcome the report, and are grateful to Mr. Justice Butterfield and his team for completing the study so promptly and for the extensive research that underpins his conclusions.

The Review's main findings are:

that there were major failings in the investigation into and prosecution of the LCB cases, investigated by HMCE from 1995 to 1998;
but that, since then, there have been significant changes, including:
- far-reaching improvements in management, structure and culture within HMCE;
- changes to the legal framework controlling the regulation of Excise warehouses, which have closed the loopholes used by the criminals in the LCB frauds; and
- following the Gower/Hammond Review, the separation of responsibility for the conduct of prosecutions from responsibility for the conduct of investigations, by making the Customs and Excise Prosecutions Office
- (CEPO) accountable to the Attorney General, and not to the Commissioners of Customs & Excise, since April 2002;
that these changes have gone a long way towards dealing with the problems within HMCE underlying the LCB cases, and Mr. Justice Butterfield makes a number of recommendations designed to reinforce this change process.

Mr. Justice Butterfield also identifies three important areas of concern in criminal law and practice highlighted by the LCB cases, all of which have a wider application than HMCE cases. These are:

the use of "abuse of process" in trials as a mechanism for attacking investigation processes;
the challenges investigators and prosecutors face in complex cases in meeting their disclosure obligations under the Criminal Procedure and Investigations Act 1996; and
aspects of informant handling.